Prysmian and General Cable Corporation announced the signing of a merger agreement which provides for the purchase by the Italian group, world leader in cables, of 100% of the shares of the US company General Cable at the price of 30 dollars per share.
The transaction, according to a note, gives General Cable a valuation, including the company's net financial position and other liabilities, equal to approximately 3 billions of dollars, for a premium of approximately 81% over the price reached by the General Cable stock on July 14, 2017, $16,55 per share, the last trading day before the company announced the start of an analysis process of strategic alternatives.
Completion of the acquisition, approved unanimously by the boards of both companies, is expected by the end of the third quarter of 2018.
Prysmian's board also asked the CFO to analyze the opportunity to realize in the next 12 months a capital increase or other similar operations for a total maximum amount of 500 million euros as part of the acquisition of General Cable.
The group resulting from the merger would be able to generate, on the basis of the aggregate pro-forma results for the twelve months ended 30 September 2017, a turnover of over 11 billion euro and an adjusted EBITDA of approximately 930 million EUR. These are the figures contained in the Prysmian note.
post-merger, the new reality will be present in more than 50 countries with around 31 employees. Prysmian expects to generate around 150 million euros in cost synergies, fully operational and gross of tax effects, within five years of finalizing the transaction, synergies which will mainly be generated thanks to an improvement in the procurement strategy, a more efficient general costs and the optimization of the production structure. Extraordinary integration costs are estimated at around 220 million. It is expected that, for Prysmian shareholders, the transaction can be accretive, in terms of earnings per share, by 10-12% already within the first year following its completion.
At Piazza Affari, Prysmian shares drop 2,56% at 27,77 euro.
